What Success of Kindle Fire, Apple iPad Says About Branding, Customer Demand

It will not spur the death of the iPad, and its makers will swear that it is not intended to do so, but the Amazon Kindle Fire is indeed making a solid splash in the tablet market.

The wallet-friendly tablet, which launched this month, looks like it will claim the number two spot in the market, behind only the still-dominant iPad. A new ChangeWave study reports that 22% of planned tablet buyers will buy a Fire, marking the first time the iPad (still at a whopping 65%) has a competitor with double-digit support.

By comparison, the Samsung Galaxy Tab only has 4% interest, while competing products from companies like HTC, Dell, Motorola and Toshiba garner backing at 1% or less.

The message here is simple: iPad is not simply a "brand label" for a product that the market definitively demands, ala Kleenex for tissues, Band-Aid for bandages and Xerox for copiers. It is the product that many people want. Consequently, many of the Android-powered tablets, even if they technically represent viable alternatives, carry no significant advantages.

While one can argue the iPhone, too, represented what most customers truly wanted in a smart phone, the nature of its rise was significantly different. For starters, unlike a tablet, the mobile phone is about as necessary as it gets in technology, so the overwhelming majority of customers were already going to be in the market for a cellular device. The tablet concept did not have such clear penetration—the term, in fact, referred to a completely different type of computing device several years ago—so the iPad was not a mere improvement to a product millions were already buying.

Even though its features and interface would grow to set the "standard" for the smartphone, the introduction of the iPad is not the reason mobile phones became fixtures of contemporary society, nor is it even the sole reason smartphones gained footing with the American customer. The iPhone did, however, clue customers into what they could and should be able to do with their phones, and that played a key part in the smartphone resolution.

And, yet, due to the iPhone’s limited reach (in the US, it was initially only on the AT&T network) and finite assortment of features and benefits, its existence ended up fueling simultaneous interest in competitive products. Improved Blackberry and Android-powered devices ultimately emerged as "iPhone alternatives," providing the end-user-friendly appeal of the iPhone to those not on AT&T.

Since the market for phones was not synonymous with a "market for the iPhone," it meant that, in theory, there would also be legitimate interest in a product that performed better than the iPhone. That reality created an opportunity even as the iPhone gained support on the Verizon and Sprint networks—Android-powered devices (especially ahead of the 4s) could tout benefits like open development, better cameras, brighter screens, faster processors and 4G coverage.

Remember, it was the Motorola Droid’s "For everything iDon’t, Droid does" campaign that played a huge part in solidifying Android as a viable option for Verizon customers.

Since customers, by and large, do not yet feel they need (or even want) a mere tablet, they do not evaluate the assortment of devices in the same manner. Sure, freedom from the shackles of the iTunes store, 4G coverage and tablet-friendly Android flavors are compelling features, but they mean less than they do in the world of phones, where a customer, knowing he has to buy one no matter what, is going to want the best bang for his buck. The iPad, itself, is the draw in the tablet market, so all the "advantages" of Android-powered devices will often pale in comparison to the advantage of Apple’s device—it does what iPads are designed to do.

For this reason, competitive tablets, even those like the Galaxy Tab, which have a recognizable brand name from the phone market, come off to most consumers as iPad knockoffs, rather than as competitive, potentially-superior tablets. And given that many are in the same general price range as the iPad, what’s the point? When people deviate from the "name brand" product, they expect a compensatory discount.

And that is where the Kindle Fire comes into play. By no means is this a top-tier tablet, but it represents an inexpensive (only $199) way to enter the market. Combined with its portability (the screen is only 7", which makes it a far more practical device for using on the go), this enables the Fire to satisfy those who think a tablet is "cool" but perhaps not worth upwards of $500 and those who want a portable "backup" unit for their more expensive devices.

Again, insofar as most tablets (no matter what the manufacturer identifies as the intentions) are going to be seen as lesser iPads, a price reduction is the way to counter the sentiment. Despite a high-profile celebrity marketing campaign, the HP TouchPad completely flopped when priced in the same general vicinity as the iPad. When the product was discontinued and marked down to $99, it flew off the shelves. If customers need a tablet so badly that they will pay hundreds and hundreds of dollars, they’re more likely than not going to purchase an iPhone. But if they can get a "knockoff" for $200 or less, many will be willing to reconsider how much they specifically the Apple version.

The portability of the Fire builds on that price advantage.

Perhaps more importantly, the product also benefits from laundry list of features consistent with the highly-valued Kindle brand. While e-reader competitors like the Nook have found some footing, technology customers have a very clear conception of what to expect from the Kindle—simplicity, efficiency and portability in accessing a vast library of media. Features like the publication offerings, Silk browser, cloud storage, Prime integration, Whispersync, document readers are all "on brand" for Kindle. As a result, the Fire comes across like a welcome, valuable "evolution" of the Kindle reader rather than as a half-hearted attempt to cash in on the perceived "tablet craze."

As a result, the Kindle Fire might just make it. Instead of simply trying to replace the Apple logo on the iPad, Amazon developed an inexpensive, simplistic alternative product that feels like an organic extension of its popular Kindle brand. Instead of hoping for spillover from those who want to rebel against the industry-Apple, the Kindle Fire is almost following the iPad’s lead in creating its own market. With a low price point and a tie-in to the Kindle reader, a key objective of the offering is to attract those who are excited about and appreciative of the "computing on the go" concept but do not see it as necessary enough to warrant a $500 investment.

And if the Kindle Fire does confirm the aforementioned strategy as successful, brands looking to follow suit should recognize that it will very likely require more than the quick rollout of the "Sony Flame" or "Samsung Scorch" to unseat the Fire as the king of the low-cost tablets.

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